Walker administration stays on sidelines as feds set up Wisconsin's health insurance exchange

Erpenbach (right): 'We have an opportunity here to talk with the feds about what goes on here.'

As the federal government works on setting up a health insurance exchange in Wisconsin, the governor's office appears to be largely silent on how it would like the system to be set up.

Concerned over this silence, Democratic legislators and health care advocates invited Kenneth Munson, director of the U.S. Department of Health and Human Services Region V -- which covers Wisconsin, Illinois, Indiana, Ohio, Michigan and Minnesota -- to Madison Thursday to find out where the process stands, provide suggestions and ask questions.

Insurance exchanges are portals that are supposed to help insurers comply with the new Patient Protection and Affordable Care Act and give residents a place to shop for plans and compare them side by side. States had the option of setting up their own exchange, partnering with the federal government, or letting the feds do all the work. Last November, Walker announced that he would let the federal government do it. Because states all have different regulations for insurance companies, this isn't a simple task.

Munson said there are still opportunities for state officials to help craft the process. He said he hasn't had regular contact with anyone from the governor's office, but said other federal officials might be having regular discussions.

Sen. Jon Erpenbach (D-Middleton), who co-chaired the meeting, says he invited representatives from the governor's office, the Office of Insurance Commissioner, and the Department of Administration, as well as Republican legislators. None showed up.

After the meeting, Erpenbach says he was disappointed with the lack of participation. "I don't know if there are any conversations going on with the state and federal government. If there are, that's great," he says. "As far as we know, there aren't. We have an opportunity here to talk with the feds about what goes on here."

During the meeting, Erpenbach asked Munson if there was any possibility someone besides the governor's office could establish an advisory board or name a liaison to give the federal government guidance.

"I'm not aware of anything that says appointing someone is against the law," Munson responded. "But as a practical matter, how do you get someone who represents all of the state's interests?"

J.P. Wieske, spokesman for the state's Office of the Commissioner of Insurance, says state officials regularly talk to the federal government about the exchange. But he says the administration is frustrated with how the feds are moving on the issue.

"There are a variety of issues as a regulator we have to deal with. We continue to wait for federal guidance," he says. "They're slowly meting out what they think and then giving us a small window to respond."

As for why nobody attended the Thursday's meeting, Wieske says: "I"m not so sure that was the right forum to have a discussion."

He adds: "It's great to have a meeting, but we need to have these final rules in writing," he says, referring to the health care act's final administrative rules. "The fact that a lot of these rules aren't yet finalized is a pretty big problem."

Time is precious. The exchanges are scheduled to be up and running by October. People who want to buy insurance on the exchange will have until March to buy a plan, after which the exchange will close for a year.

The limited period is to prevent people from gaming the system. Under the old system, insurance companies could deny coverage to unhealthy customers and healthy people could simply decide not to buy insurance. But under the Affordable Care Act, no one can be denied coverage and everyone has to purchase their own insurance or receive it through work or a subsidized government plan.

"Now anyone can buy insurance. They can't be denied, but what comes with that is the responsibility," explains Robert Kraig of Citizen Action of Wisconsin, who was at Thursday's meeting. "There's a balance between the right to health care and the responsibilities people have."

But numerous questions need to be sorted out. How many markets will there be in the state? The law allows for up to seven. Who will make sure insurers comply with new regulations in the law? How will the federal government publicize the insurance exchange, especially to those people who might get dropped from Medicaid? Where will people go if they have complaints or questions?

Munson didn't have an answer to most of these questions.

He said that in every state, the system is somewhat "self-selecting" -- stakeholders who want to affect how the exchange is structured simply need to get involved.

Bobby Peterson, executive director of ABC for Health, says the governor's office has made it clear it wants to sit this one out.

"The ideal situation is that states are active and involved," he says. "This is not something they really wanted to be a part of and it's too radioactive for them to get too closely involved in."

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